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An effective estate plan requires certain key documents

The thought of sitting down to put together a will may naturally be unappealing, as people prefer to focus on enjoying life rather than contemplating what would happen to their belongings if they died. Failure to develop an estate plan, however, may mean that a person's family members in Michigan will not end up getting the assets he or she would like them to have in the future. A well-thought-out estate plan also helps to minimize stress and potential conflict among family members after one has died.

It is important to create a will or establish a trust. A will is less expensive, but a trust offers the advantage of allowing one's personal assets to be distributed to surviving loved ones with more privacy. Still, it will need to go through the process of probate in order to distribute to the parties named in the will any property that is not being held in one's trust.

Michigan residents can learn from estate plan mistakes

No plan is fool-proof, including an estate plan. While a vital process for any adult in Michigan, there are mistakes in the estate planning process that can truly disrupt or paralyze a person's efforts to have his or her wishes honored after death. Several recent celebrity deaths and estate planning details have made the news as a lesson for others who wish to avoid common estate planning mistakes.

Robin Williams serves as one example. He had a trust in place for his children as a means of leaving them assets privately. However, a co-trustee died before Williams, and the trust then was made public. As a result, everyone knows what he left to whom. This was exactly opposite of the reason for the trust creation in the first place.

An estate plan is a necessity for Michigan single parents

Being a parent inherently means there are countless decisions and considerations that must be made with the best interest of the children in mind. When a parent is raising children alone, the need for a comprehensive estate plan is imperative, as the fate of children may hang in the balance if a parent dies. Any Michigan single parent who does not have an estate plan may want to create one and include the following documents and provisions.

Single parents need to think about who will raise their children in the case of their death. Appointing a guardian may be the most important estate-planning decision a single parent may ever make. If the other parent is a fit and stable parent, that person will get custody. However, a single parent should always make a provision for an additional guardian in case that parent were to be unfit at any given time or deceased at the time a guardian is needed.

An estate plan may evolve and need revisiting over time

For many people, simply getting around to creating an estate plan is a major life feat in itself. It is a necessary part of life once one acquires any kind of assets or has a family. However, as much as people may feel like they've been responsible in creating an estate plan, it is essential for Michigan families to understand that an estate plan is not a one-shot milestone. An estate plan needs to be managed and evolve as the times dictate.

One reason to revisit an estate plan is the changes in the tax code. Tax exemption changes could greatly impact an estate plan as it stands. Simple modifications to amounts left in trusts can help minimize the impact any changing tax code laws may have on beneficiaries and the amount of money open to taxation in general.

A Michigan family estate plan should include online assets

People tend to think about physical assets when they prepare to create an estate plan or discuss one with family members. However, as technology permeates the lives of the young and old, an estate plan needs to include digital assets and instructions for online accounts just as much as it may include instructions for physical assets. Families in Michigan may want to discuss plans and set up a plan to deal with these accounts or update an existing plan as needed.

One essential piece of information that needs to be shared or entered into an estate plan is the passwords to these various accounts. If these accounts pertain to bank accounts or are tied to finances in some way, it is vital to ensure that beneficiaries have these passwords somehow. A simple list of accounts and passwords can be added to any estate-planning documents.

An estate plan for Michigan families is about more than dollars

People may naturally think that creating estate plans is about how to distribute funds to family members. While the distribution of family fortunes is most certainly part of an estate plan, Michigan families may want to think about how they can incorporate their faith and values into that plan. There are numerous ways a person may carry on religious values, traditions or expectations that reach beyond the scope of a dollar amount.

One way to incorporate or continue a means of support for religious values or organizations is to create a charitable trust for a church or charity that matters. It may be a one-time payout of a trust, or this can be in the form of distributions to go on for years to come. These can be very personal decisions for benefactors and beneficiaries.

A will challenge can happen to any Michigan family

One of the most vital and popular documents drafted when an estate plan is set in motion is a will. A will is important and is put in place to clearly outline a person's last wishes regarding his or her estate. Yet, having a will may not be enough to stave off a will challenge. Under some circumstances, family members may find themselves united in the pursuit of a will challenge after a loved one's death. For any Michigan family, comprehensive legal advice and guidance can help to navigate a will challenge situation.

Even with the best of intentions, a will may leave unanswered questions and an opening for a challenge. This can occur if assets are acquired or significant wealth is gained after a will is drafted. If these assets are not added to a will, beneficiaries may dispute the way in which they are bequeathed. Also, a will challenge may arise if the wording is unclear or if family members interpret the instructions differently.

Trust management requires knowledge of various types of trusts

When deciding on the kind of estate plan to put in motion, it is important to understand the various options for giving or bequeathing assets. One tool is the creation of a trust. However, before leaving trust management responsibilities to any one party or taking on the task of creating a number of trusts, it is vital that you understand the various types of trusts that are available to Michigan residents and decide what is best for your family or beneficiaries.

A trust is a customized and tailor-made way to distribute assets and funds to particular groups or beneficiaries. One positive aspect of creating trusts is that you have the freedom to impose stipulations or outline specific instructions and guidelines for how and when bequeathed assets or funds may be used. Some common types of trusts are irrevocable trusts, special needs trusts and minor children's trusts.

Reproductive science may play role in estate plan

An estate plan is a highly personal journey for most families. Most people don't think of the role science may play when they are creating an estate plan. Reproductive science and changing families are playing a role in how the average Michigan family may choose to pursue the creation of an estate plan.

The freezing of eggs is becoming a more commonplace part of how couples reproduce, as is noted in the fact that several companies now cover egg freezing as part of their health plans. The frozen eggs can be seen as future heirs as a family moves forward with deciding the fate of assets and property. There are never-ending scenarios regarding how frozen eggs can complicate a plan, such as the fate of those eggs if the biological mother dies before using them.

The type of trust can determine trust management

When people think about creating a trust, they may automatically think about leaving sums of money to kids and determining how to ensure that those funds are spent appropriately. The truth is that there are many types of trust funds and trust management options from which Michigan families may choose. The type of trust a family decides to create will depend on that family's unique circumstances.

The idea of leaving a specified amount to each child may not sit well with some families, and it may be a bad idea for some overall. There are generation-skipping trusts for those who do not wish to leave directly to children but want to ensure that grandchildren reap certain rewards from acquired wealth. Some beneficiaries, such as children with special needs, may need more funding compared to other family members. A special needs trust may be set up to care for that child or beneficiary for the long-term.

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